by Our Diplomatic Editor
India has lodged a strong protest with Sri Lanka over the allocation of a prime Colombo property to a Chinese company though it was earmarked for India.The protests were delivered both in New Delhi and Colombo, an External Affairs Ministry source said yesterday. He was speaking on grounds of anonymity since EAM officials are not allowed to talk to the media.
The 287-perch property, once occupied by Whittal Boustead and Company, with frontage both to the Galle Road and the Duplication Road, has been given to the Chinese aircraft manufacturing firm CATIC or China National Aero Technology Import and Export Corporation. It is for what has been described as a “flagship project”. It is not immediately clear how much the Chinese company paid for the deal.
EAM sources revealed that the property was earmarked to be given to India and the formalities had been completed. The Indian High Commission had in accordance with existing procedures, written to the External Affairs Ministry to purchase the property, a requirement for any Colombo based diplomatic mission.
The Indian protest is based on the fact that its formal request to the EAM was pending for more than one and half months when it learnt that the property had already been allocated to the Chinese company. India had, these sources said, agreed to pay seven million rupees per perch with the total coming to Rs. 2009 million.
It was only in September last year that CATIC was first allowed to purchase outright seven acres of land at Galle Face Green, just adjoining the Shangri La where construction work on a luxury hotel cum apartment complex is now under way. However, this was later changed to a 99-year lease but CATIC preferred to obtain another site.
At that time, Economic Development Minister Basil Rajapaksa said in a cabinet paper: “CATIC is a large conglomerate operating in China and owns 11 grand hotels and 56 hypermarkets, through projects funded under the credit facilities mobilised from the Exim Bank of China.” An advance payment made for the property also became a controversy with a Memorandum of Understanding by the government with CATIC saying it was US$ 50 million and Economic Development Deputy Minister Lakshman Yapa Abeywardena, telling Parliament that it was US $ 54.4 million.
The same Colombo property was also once offered to the US Embassy. After a study, the US mission was not in favour of purchasing it for security reasons. Any evacuation from the embassy in a crisis, a leaked Wikileaks cable said, would become difficult since the property did not have sea frontage.
The Indian protests come in the backdrop of the visit of Commerce, Industry and Textiles Minister, Anand Sharma to Sri Lanka with a delegation of leading business entrepreneurs. India agreed to invest in several fields and named its own members to a bi-lateral commission. It was to be an agency to monitor matters related to trade and investment.